SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



Form 10-QSB



Quarterly Report Pursuant to Section 13 of 15(d) of

The Securities and Exchange Act of 1934



For the quarterly period ended: September 30, 2007



Commission File Number: 0005468



ANGELCITI ENTERTAINMENT, INC.

(Exact name of registrant as specified in its charter)



ICHANCE INTERNATIONAL, INC.

(Former name of registrant)



|                               |                    
|------------------------------ | -------------------
|Nevada                         | 52-2043569         
|State or other jurisdiction of | (I.R.S. Employer   
|Incorporation or organization) | Identification No.)



9000 Sheridan Street, Suite 7 Pembroke Pines, FL 33024

(Address of Principal Executive Offices including zip code)



(800) 908-9574

(Issuers Telephone Number)



Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period of that the registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days. Yes ý No  ̈



Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the exchange Act after the distribution of securities under a plan confirmed by a court.



N/A



As of September 30, 2007, there were 9,606,985 shares of the Registrants Common Stock, par value $0.00025 per share, issued and outstanding.



Transitional Small Business Disclosure Format Yes  ̈ No ý















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Part I.

FINANCIAL INFORMATION



Item 1.

Financial Statements



ANGELCITI ENTERTAINMENT, INC.

FINANCIAL STATEMENTS

SEPTEMBER 30, 2007

(UNAUDITED)



ANGELCITI ENTERTAINMENT, INC.



Table of Contents

|                                                                                                     |  |        
|---------------------------------------------------------------------------------------------------- |  | -------
|                                                                                                     |  | Page(s)
|                                                                                                     |  |        
|Balance Sheet at September 30, 2007 (Unaudited)                                                      |  | 1      
|                                                                                                     |  |        
|Statements of Operations for the three and nine months ended September 30, 2007 and 2006 (Unaudited) |  | 2      
|                                                                                                     |  |        
|Statements of Cash Flows for the nine months ended September 30, 2007 and 2006 (Unaudited)           |  | 3      
|                                                                                                     |  |        
|Notes to Financial Statements at September 30, 2007 (Unaudited)                                      |  | 4-6    













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AngelCiti Entertainment, Inc.

Balance Sheet

September 30, 2007

(Unaudited)



|                                                                                                                |  |   |            |  
|--------------------------------------------------------------------------------------------------------------- |  | - | ---------- | -
|ASSETS                                                                                                          |  |   |            |  
|Current Assets                                                                                                  |  |   |            |  
|Cash                                                                                                            |  | $ | 174        |  
|Other current asset                                                                                             |  |   | 300        |  
|Total Current Assets                                                                                            |  |   | 474        |  
|                                                                                                                |  |   |            |  
|Other Assets                                                                                                    |  |   |            |  
|Investment - non-marketable securities, at cost                                                                 |  |   | 164,667    |  
|                                                                                                                |  |   |            |  
|Total Assets                                                                                                    |  | $ | 165,141    |  
|                                                                                                                |  |   |            |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                            |  |   |            |  
|Current Liabilities                                                                                             |  |   |            |  
|Accounts payable                                                                                                |  | $ | 114        |  
|Loan payable, related party                                                                                     |  |   | 37,130     |  
|Total Current Liabilities                                                                                       |  |   | 37,244     |  
|                                                                                                                |  |   |            |  
|Stockholders' Equity                                                                                            |  |   |            |  
|Preferred stock, Series A, $0.001 par value, 50,000
shares authorized, 20,000 issued and outstanding            |  |   | 20         |  
|Convertible preferred stock, Series B, $0.001 par value, 100,000
shares authorized, none issued and outstanding |  |   |           |  
|Common stock, $0.00025 par value, 300,000,000 shares authorized 
9,606,985 shares issued and outstanding        |  |   | 2,401      |  
|Additional paid in capital                                                                                      |  |   | 6,275,873  |  
|Accumulated deficit                                                                                             |  |   | (6,150,396 | )
|Total Stockholders' Equity                                                                                      |  |   | 127,897    |  
|                                                                                                                |  |   |            |  
|Total Liabilities and Stockholders' Equity                                                                      |  | $ | 165,141    |  



































See accompanying notes to financial statements



1





---

AngelCiti Entertainment, Inc.

Statements of Operations

(Unaudited)



|                                                                                     |  |                                  |           |                                 |   |           |   |      |           |   |   |           |  
|------------------------------------------------------------------------------------ |  | -------------------------------- | --------- | ------------------------------- | - | --------- | - | ---- | --------- | - | - | --------- | -
|                                                                                     |  | Three Months Ended September 30, |           | Nine Months Ended September 30, |  
|                                                                                     |  | 2007                             |           | 2006                            |   | 2007      |   | 2006 |          
|                                                                                     |  |                                  |           |                                 |   |           |   |      |           |   |   |           |  
|Casino Revenues, net                                                                 |  | $                                |          |                                 | $ |          |   | $    |          |   | $ | 104,893   |  
|                                                                                     |  |                                  |           |                                 |   |           |   |      |           |   |   |           |  
|Operating Expenses                                                                   |  |                                  |           |                                 |   |           |   |      |           |   |   |           |  
|Amortization and Depreciation                                                        |  |                                  |          |                                 |   |          |   |      |          |   |   | 1,500     |  
|Affiliate Commission                                                                 |  |                                  |          |                                 |   |          |   |      |          |   |   | 12,722    |  
|Bad debts                                                                            |  |                                  |          |                                 |   |          |   |      |          |   |   | 21,645    |  
|Consulting                                                                           |  |                                  |          |                                 |   |          |   |      | 6,818     |   |   | 74,842    |  
|Royalty                                                                              |  |                                  |          |                                 |   |          |   |      |          |   |   | 20,000    |  
|Legal & Professional fees                                                            |  |                                  | 5,328     |                                 |   | 6,413     |   |      | 32,273    |   |   | 80,971    |  
|Rent                                                                                 |  |                                  |          |                                 |   | 329       |   |      |          |   |   | 3,411     |  
|General and Administrative                                                           |  |                                  | 30        |                                 |   | 5,050     |   |      | 5,565     |   |   | 96,682    |  
|Total Operating Expenses                                                             |  |                                  | 5,358     |                                 |   | 11,792    |   |      | 44,656    |   |   | 311,773   |  
|                                                                                     |  |                                  |           |                                 |   |           |   |      |           |   |   |           |  
|Loss from Operations                                                                 |  |                                  | (5,358    | )                               |   | (11,792   | ) |      | (44,656   | ) |   | (206,880  | )
|                                                                                     |  |                                  |           |                                 |   |           |   |      |           |   |   |           |  
|Other Income                                                                         |  |                                  |           |                                 |   |           |   |      |           |   |   |           |  
|Interest income                                                                      |  |                                  |          |                                 |   | 95        |   |      |          |   |   | 341       |  
|Other income                                                                         |  |                                  |          |                                 |   |          |   |      |          |   |   | 177,285   |  
|Total Other Income                                                                   |  |                                  |          |                                 |   | 95        |   |      |          |   |   | 177,626   |  
|                                                                                     |  |                                  |           |                                 |   |           |   |      |           |   |   |           |  
|Other Expense                                                                        |  |                                  |           |                                 |   |           |   |      |           |   |   |           |  
|Loss on sale of subsidiaries                                                         |  |                                  |          |                                 |   |          |   |      |          |   |   | 53,225    |  
|Total Other Expense                                                                  |  |                                  |          |                                 |   |          |   |      |          |   |   | 53,225    |  
|                                                                                     |  |                                  |           |                                 |   |           |   |      |           |   |   |           |  
|Total Other Income, net                                                              |  |                                  |          |                                 |   | 95        |   |      |          |   |   | 124,401   |  
|                                                                                     |  |                                  |           |                                 |   |           |   |      |           |   |   |           |  
|Net Income (Loss)                                                                    |  | $                                | (5,358    | )                               | $ | (11,697   | ) | $    | (44,656   | ) | $ | (82,479   | )
|                                                                                     |  |                                  |           |                                 |   |           |   |      |           |   |   |           |  
|Net Income (Loss) Per Share - Basic and Diluted                                      |  | $                                | (0.00     | )                               | $ | (0.00     | ) | $    | (0.00     | ) | $ | (0.01     | )
|                                                                                     |  |                                  |           |                                 |   |           |   |      |           |   |   |           |  
|Weighted average number of shares outstanding 
during the period - basic and diluted |  |                                  | 9,606,985 |                                 |   | 9,606,985 |   |      | 9,606,985 |   |   | 9,573,230 |  
|                                                                                     |  |                                  |           |                                 |   |           |   |      |           |   |   |           |  













See accompanying notes to financial statements



2





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AngelCiti Entertainment, Inc.

Statements of Cash Flows

(Unaudited)



|                                                                            |  |                                 |         |      |   |          |  
|--------------------------------------------------------------------------- |  | ------------------------------- | ------- | ---- | - | -------- | -
|                                                                            |  | Nine Months Ended September 30, |        
|                                                                            |  | 2007                            |         | 2006 |  
|                                                                            |  |                                 |         |      |   |          |  
|Cash Flows from Operating Activities:                                       |  |                                 |         |      |   |          |  
|Net loss                                                                    |  | $                               | (44,656 | )    | $ | (82,479  | )
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                                 |         |      |   |          |  
|Loss on sale of subsidiary                                                  |  |                                 |        |      |   | 53,225   |  
|Amortization of stock based deferred expenses                               |  |                                 |        |      |   | 60,061   |  
|Changes in operating assets and liabilities:                                |  |                                 |         |      |   |          |  
|(Increase) decrease in:                                                     |  |                                 |         |      |   |          |  
|Accounts receivable                                                         |  |                                 |        |      |   | 29,000   |  
|Other receivable related party                                              |  |                                 |        |      |   | 200      |  
|Prepaid and other assets                                                    |  |                                 | 8       |      |   | (549     | )
|Increase (decrease) in:                                                     |  |                                 |         |      |   |          |  
|Accounts payable                                                            |  |                                 | (3,903  | )    |   | (74,523  | )
|Accounts Payable, related party                                             |  |                                 |        |      |   | (16,128  | )
|Net Cash Used in Operating Activities                                       |  |                                 | (48,551 | )    |   | (31,193  | )
|                                                                            |  |                                 |         |      |   |          |  
|Cash Flows from Investing Activities:                                       |  |                                 |         |      |   |          |  
|Cash sold as part of  subsidiary                                            |  |                                 |        |      |   | (73,889  | )
|Net Cash Used in Investing Activities                                       |  |                                 |        |      |   | (73,889  | )
|                                                                            |  |                                 |         |      |   |          |  
|Cash Flows from Financing Activities:                                       |  |                                 |         |      |   |          |  
|Proceeds from issuance of common stock, net of offering costs               |  |                                 |        |      |   | 1,875    |  
|Proceeds from loan payable - related party                                  |  |                                 | 37,130  |      |   | -        |  
|Repayment of loan payable - related party                                   |  |                                 |        |      |   | (199     | )
|Net Cash Provided by Financing Activities                                   |  |                                 | 37,130  |      |   | 1,676    |  
|                                                                            |  |                                 |         |      |   |          |  
|Net Decrease in Cash                                                        |  | $                               | (11,421 | )    | $ | (103,406 | )
|                                                                            |  |                                 |         |      |   |          |  
|Cash at Beginning of Period                                                 |  |                                 | 11,595  |      |   | 118,895  |  
|                                                                            |  |                                 |         |      |   |          |  
|Cash at End of Period                                                       |  | $                               | 174     |      | $ | 15,489   |  
|                                                                            |  |                                 |         |      |   |          |  
|Supplemental Disclosure of Cash Flow Information:                           |  |                                 |         |      |   |          |  
|Cash Paid for:                                                              |  |                                 |         |      |   |          |  
|Taxes                                                                       |  | $                               |        |      | $ |         |  
|Interest                                                                    |  | $                               |        |      | $ |         |  
|                                                                            |  |                                 |         |      |   |          |  





See accompanying notes to financial statements



3





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AngelCiti Entertainment, Inc.

Notes to Financial Statements

September 30, 2007

(Unaudited)



NOTE 1  BASIS OF PRESENTATION AND CHANGE IN NATURE OF OPERATIONS



The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules and regulations of the United States Securities and Exchange Commission for interim financial information. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position and results of operations.



It is management's opinion, however, that all material adjustments (consisting of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The results for the interim period are not necessarily indicative of the results to be expected for the year.



For further information, refer to the audited consolidated financial statements and footnotes of the Company for the year ending December 31, 2006 included in the Company's Form 10-KSB.



The Company discontinued its operations on February 23, 2006 through the sale of its operating subsidiaries (See Note 7). The accompanying financial statements are not presented in accordance with the accounting standards for presenting discontinued operations, as there was only one operating segment.  The Company had been, up until February 23, 2006, a software licensor and administered software-based games of chance through the Internet. The Company used state-of-the-art casino gaming and sports book software under a license arrangement with a casino software development company.  The Company launched its internet gaming operations on May 2, 2002 and on February 23, 2006 signed a sale agreement disposing of the sole operating business of Angelciti, the Shark Casino.  The operating results for the three and nine months ended September 30, 2007; reflect the operations based solely on Angelciti Entertainment, Inc.s activity.



NOTE 2  GOING CONCERN



As reflected in the accompanying financial statements, the Company has a net loss of $39,299 and net cash used in operations of $48,551 for the nine months ended September 30, 2007 and a working capital deficit of $36,770 and an accumulated deficit of $6,150,396 at September 30, 2007.  In addition, in February 2006, the Company sold its operating subsidiary leaving it with no operations or future revenues. The ability of the Company to continue as a going concern is dependent on the Company's ability to consummate an acquisition of one or more companies. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.



NOTE 3  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



(A) Non-Marketable Securities



Certain securities that the Company may invest in can be determined to be non-marketable. Non-marketable securities where the Company owns less than 20% of the investee are accounted for at cost pursuant to APB No. 18, "The Equity Method of Accounting for Investments in Common Stock" ("APB 18").



The Company periodically reviews its investments in non-marketable securities and impairs any securities whose value is considered non-recoverable. There were no impairment losses charged to operations during the three and nine months ended September 30, 2007 and 2006, respectively.





4





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AngelCiti Entertainment, Inc.

Notes to Financial Statements

September 30, 2007

(Unaudited)



(B) Net Loss per Share



Basic earnings (loss) per share is computed by dividing the net income (loss) less preferred dividends for the period by the weighted average number of common shares outstanding. Diluted earnings per share is computed by dividing net income (loss) less preferred dividends by the weighted average number of common shares outstanding including the effect of share equivalents, such as stock options and warrants. Since the Company reported a net loss for the three and nine months ended September 30, 2007 and 2006, respectively, all common stock equivalents would be anti-dilutive; as such, there is no separate computation for diluted earnings per share.



(C) Stock Based Compensation



All share-based payments to employees are recorded and are expensed in the statements of operations as applicable under SFAS No. 123R Share-Based Payment.  There were no stock based compensation expenses recorded during the three and nine months ended September 30, 2007 and 2006, respectively.



(D) Reclassifications



Certain amounts in the year 2006 financial statements have been reclassified to conform to the year 2007 presentation.  The results of these reclassifications did not materially affect the Companys financial position, results of operations or cash flows.



NOTE 4  INVESTMENT IN NON-MARKETABLE SECURITIES



The Company held approximately 40,046,904 common shares of Midas Entertainment, Inc.'s (a former related party) publicly traded common stock prior to an August 2006 reorganization of Midas.  The Midas shares held were exchanged on a one for one basis for shares in Textechnologies, Inc.  Subsequent to the reorganization, there was a reverse stock split of 1 share for 100 shares held.  The number of Textechnologies shares held is 400,469.  The cost basis for the investment remains at $164,667 ($0.41/share).  All Textechnologies shares are currently being treated as non-marketable securities carried at cost.



The investment in Textechnologies Inc. securities represents 100% of the Company's investments at September 30, 2007.



Activity relating to our investment in Textechnologies, Inc. stock during the nine months ended September 30, 2007 was as follows:



The composition of non-marketable securities at September 30, 2007 is as follows:



|             |          |            |                       
|------------ | -------- | ---------- | ----------------------
|             | Cost     | Fair Value | Unrealized Gain (Loss)
|Common Stock | $164,667 | $164,667   | $0                    



There was no investment income or expense for the three and nine months ended September 30, 2007 and 2006, respectively.



NOTE 5  LOANS PAYABLE AND RELATED PARTY TRANSACTIONS



During the three and nine months ended September 30, 2007, the Companys Chairman and CEO and an affiliate of the Companys Chairman and CEO advanced an aggregate $5,975 and $37,130, respectively, in working capital to the Company. The loans were non-interest bearing, unsecured and due on demand.



This related party debt financing represented 100% of all debt financing during the three months and nine months ended September 30, 2007.



5





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AngelCiti Entertainment, Inc.

Notes to Financial Statements

September 30, 2007

(Unaudited)



NOTE 6  STOCKHOLDERS EQUITY



(A) Common Stock Issuances



Nine Months Ended September 30, 2007



No issuances



Nine Months Ended September 30, 2006



The company issued 150,000 shares of common stock for net proceeds of $1,875 ($0.0125/share).



(B) Deferred Compensation



On April 5, 2005, the Company entered into a business consulting agreement with an unrelated third party to provide management services, public relations and other general business consulting services. The term of the agreement is for one year and expired April 5, 2006. The agreement provides compensation as follows: the Company issued 109,000 shares of the Company's restricted common stock and issued options to purchase 100,000 common shares with an exercise price of $1.25 per share with a term of five years to consultants. The value of the stock provided was determined based on the quoted closing trading price on the grant date. The shares had a value of $1.15 per share for a total of $125,350. In addition, the options have a cashless exercise provision, and pursuant to Black-Scholes, an option pricing method, the options had a value of $114,895 using the following assumptions: volatility of 295%, expected term of five years, zero expected dividends, and a risk free interest rate of 4.15%. The Company recorded a consulting expense over the service period. For the nine months ended September 30, 2006, the Company recorded consulting expense of $74,842 and the deferred compensation was fully amortized as of September 30, 2006.



NOTE 7  DISCONTINUED OPERATIONS



On February 23, 2006, the Company sold its two operating subsidiaries, Worldwide Management, SA and First National Consulting, Inc., to Equivest Opportunity Fund, the owner of the online gaming URLs whose operations the Company had administered (the Buyer).  The Company agreed to pay Equivest $25,000 for acquiring these subsidiaries, absorbing and assuming their respective liabilities, and indemnifying the Company against any and all liabilities relating in any way whatsoever to and from the operations of said these two subsidiaries.  These subsidiaries have never operated at a profit.  The transaction effectively marked the Companys exit from the sublicensing of on-line gaming software and administration of on-line gaming websites.  During the nine months ended September 30, 2006, the Company recognized a loss on the sale of subsidiaries of $53,225. The $177,285 of other income for the nine months ended September 30, 2006, consists primarily of recovered accounts receivable from discontinued operations that had previously been charged to operations as a bad debt expense.



6





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Item 2.

Management=s Discussion and Analysis or Plan of Operation.



MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATION



Results of Operations



Overview



In January of 2003, we purchased all of the shares of Worldwide Management, SA (Worldwide). Worldwide commenced its operations in May of 2002 as a wholly-owned subsidiary of another entity. Worldwide had become our sole operating business, as our previously formulated business plan had been abandoned and all previously conducted operations had been discontinued. In February 2006, we sold our operating subsidiaries to an unrelated third party entity. Financial results for the quarter ending March 31, 2006 reflect our discontinued operations through February 23, 2006.



As a subsidiary of the Company, Worldwide sublicensed and administered Internet casino gaming software. It did not own on-line casinos. Its operating revenues were generated solely from its administration of the on-line casino owned by Equivest Opportunity Fund, an unrelated third party (Equivest), and the sub-licensing of gaming software to Equivest. It received a fee from Equivest based upon the revenue generated by the Equivest casinos on-line play. As Worldwides operating revenues were derived as a percentage of those earned by Equivests on-line casino and Worldwides expenses include those attributable to said casino, we have described them as casino revenues and expenses to provide a better understanding of the factors affecting such revenues and expenses and the manner in which they are earned or incurred.



On February 23, 2006, we sold our two operating subsidiaries, Worldwide Management, SA and First National Consulting, Inc., to Equivest Opportunity Fund, the owner of the online gaming URLs whose operations we had administered (the Buyer). We agreed to pay Equivest $25,000 for acquiring these subsidiaries, absorbing and assuming their respective liabilities, and indemnifying us against any and all liabilities relating in any way whatsoever to and from the operations of said these two subsidiaries. These subsidiaries have never operated at a profit. The transaction effectively marked our exit from the sublicensing of on-line gaming software and administration of on-line gaming websites.



We are seeking other alternative business ventures. No assurance is given that we will identify or enter into a business combination, merger or other transaction with any other entity. A full description of our operations can be found in our Annual Report on Form 10-KSB for the year ending December 31, 2006.



Financial Results



For the three and nine month periods ending September 30, 2007, we processed net casino revenues of $0 and $0, respectively, compared to $0 and $104,893 for the same period of the prior year. The foregoing reflects the discontinuation of our on-line casino related operations during the first calendar quarter of last year. We have never operated at a profit. Our net loss from operations for the three and nine month periods ending September 30, 2007 decreased to $5,358 and $11,792 from $44,656 and $206,880 for the same periods of the prior year. The sale of our operating subsidiaries resulted in our decreased operating losses as contrasted to those suffered in the same periods of 2006. We anticipate that our ongoing operating expenses will be limited to those associated with our merger or acquisition with or of one or more operating entities, our regulatory reporting requirements and related expenses.



Government Regulation.



Our revenues had been subject to certain uncertainties associated with, among other things, the threat of potential regulation that could restrict or ban online gaming by players residing in the United States or restrict a players ability to make payments to us through US companies or companies doing business in the United States. An online casinos operations are generally subject to applicable laws in the jurisdictions in which they offer services. We believe that these regulations had a material effect on our operations. To help mitigate these effects, we relocated our servers to the Kahnawake Reservation in Quebec, Canada, where we felt the regulatory environment was more favorable to our operations.





7





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Some of the regulatory risks that we faced were as follows:



·

Legislation would prohibit online casino gaming in the United States, where the vast majority of our players resided.

·

Laws in the United States would be interpreted to criminalize the processing of online gaming transactions or the advertising and promotion of online gaming websites

·

That regulation in certain jurisdictions would have created certain advantages for our competitors

·

That regulations, taxes or other charges would be imposed on online commerce in general



LIQUIDITY AND CAPITAL RESOURCES



We have never operated at a profit. We have historically been forced to rely on additional investment capital and related party loans to remain in business. As of September 30, 2007, we had cash of $174 and had a working capital deficit of $36,770 at that date. During the quarter ending September 30, 2007, we used $48,551 of net cash for our operations. However, as of September 30, 2007, we owned 400,469 common shares of Textechnologies, Inc. (Textechnologies). These shares are traded on the NASDAQ Over-the-Counter Pink Sheets, but are highly illiquid. No assurance is given that we will be able to sell our Textechnologies common shares at favorable terms, or at all.



Our success will ultimately be dependent upon our ability to identify and close a merger transaction with a suitable entity and/or acquire one or more suitable operating businesses. No assurance is given that we will successfully conclude such a transaction.



We believe that we have sufficient cash on hand to remain in business over the next three-month period. While we are hopeful that we can consummate our current merger negotiations, we cannot be certain that we will be able to do so



FUTURE EXPENDITURES



As we have discontinued our on-line gaming related activities, our future capital, marketing, research and development, and other expenditures, as well as our future staffing requirements will depend upon the entity or entities that we acquire or merge with and our ability to generate revenues or additional investment capital if our revenues are not sufficient.



CRITICAL ACCOUNTING POLICIES



The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumption that have a significant impact on the results we report in our financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Actual results may differ from these estimates under different assumptions or conditions.



Valuation of Non-cash Capital Stock Issuances. We value our stock transactions based upon the fair value of the equity instruments used in the particular transaction, pursuant to the fair value accounting provisions of SFAS No. 123R. Various methods can be used to determine the fair value of the equity instrument. We may use the fair value, the quoted market price or the contemporaneous cash sale price of the stock based consideration. Each of these methods may produce a different result. We use the method that most appropriately reflects the value of the transaction to us. If a difference method was used it could impact the expense, deferred stock and equity stock accounts.



Income Taxes. We continue to record a valuation allowance for the full amount of deferred income taxes, which would otherwise be recorded for tax benefits related to operating loss carryforwards, as realization of such deferred tax assets cannot be determined to be more likely than not likely.



Valuation of Investment in Non-Marketable Securities. We have determined our investment in Textecnologies common shares to be non-marketable and have accounted for the same at cost pursuant to APB No. 18, The Equity Method of Accounting for Investments in Common Stock(APB 18). While there is a trading market for these shares, the trading market is quite thin and we may never be able to liquidate all or a portion of these shares at suitable prices or at any price. Our ability or inability to liquidate these shares could impact our current assets and investment in non-marketable securities-related party-at cost account.



8





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OFF BALANCE SHEET ARRANGEMENTS



We have no off-balance sheet arrangements.



Item 3.

Controls and Procedures



We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the specified time periods. As of the end of the period covered by this Report, our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures and internal control over financial reporting. Based on the evaluation, which disclosed no significant deficiencies or material weaknesses, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures and internal controls over financial reporting are effective and have been designed and are being operated in a manner that provides reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms. A system of controls, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the systems of controls are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. There were no changes in our disclosure controls and procedures or internal control over financial reporting that occurred during the quarter covered by this Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.





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PART II.

OTHER INFORMATION



Item 1.

Legal Proceedings



We are not subject to any legal proceedings.



Item 2.

Changes in Securities. - None



Item 3.

Defaults upon senior securities - None



Item 4.

Submission of matters to a vote of security holders - None



Item 5.

Other Information - None



Item 6.

Exhibits and Reports on Form 8-K



(a) The following exhibits and financial statement schedules are filed as exhibits to this Report:

1. Financial Statements of the Registrant are included under Part 1 Item 1, hereof.

2. Financial Statement Schedules - None

3. Exhibits:



|            |  |                                                                                                                    
|----------- |  | -------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                        
|            |  |                                                                                                                    
|3.1         |  | Articles of Incorporation, as amended*                                                                             
|3.2         |  | Bylaws, as amended**                                                                                               
|4.1         |  | Common Stock Certificate**                                                                                         
|14.1        |  | Code of Ethics***                                                                                                  
|21.1        |  | Names of Subsidiaries*                                                                                             
|31.1        |  | Rule 13a-14(a)/15d-14(a) Certification of George Guttierez                                                         
|32.1        |  | Certification Pursuant to 18 U.S.C Section 1350as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



*

Incorporated by reference to our Form 10-KSB filed with the U.S. Securities and Exchange Commission on April 5, 2005.

**

Incorporated by reference to our Form 10-SB12G filed with the U.S. Securities and Exchange Commission on April 4, 2000

***

Incorporated by reference to our Form 8-K filed on February 18, 2005.



(b) Reports on Form 8-K Incorporated by reference.

None



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SIGNATURES



In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant caused this report as amended to be signed on its behalf by the undersigned, thereunto duly authorized.



|                                                                                                                                                                                                |       |                                        
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----- | ---------------------------------------
|Date: November 16, 2007                                                                                                                                                                         | By: : | /s/ GEORGEGUTIERREZ                    
|                                                                                                                                                                                                |       | George Gutierrez, CEO and President    
|                                                                                                                                                                                                |       |                                        
|In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated
|                                                                                                                                                                                                |       |                                        
|Date: November 16, 2007                                                                                                                                                                         | By: : | /s/  GEORGEGUTIERREZ                   
|                                                                                                                                                                                                |       | George Gutierrez, CEO, CFO and Director
|                                                                                                                                                                                                |       |                                        
|Date: November 16, 2007                                                                                                                                                                         | By:   | /s/  GRACEBUSTAMENTE                   
|                                                                                                                                                                                                |       | Grace Bustamente, Director             
|                                                                                                                                                                                                |       |                                        







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